The Future of Tracking Devices and Usage-Based Insurance

According to the Wall Street Journal, some consumers have said they are wary of using tracking devices offered by insurers to assess their driving and potential for discounts for good driving. Insurance companies are increasingly using personal data to assess risk and fine-tune their pricing of policies—or at least to provide discounts. As insurers have tested tracking devices, they have learned that hard braking apparently is the most powerful predictor of accidents, and also that a mile driven at 2 am appears to be four or five times riskier than one driven at 7 am. Some consumers and consumer advocates have expressed doubts about the use of tracking devices: some claim to be worried about “Big Brother,” and others have voiced concerns about how location data will be used. Other consumers, however, say they are happy to participate in these programs in exchange for possible discounts and cost savings. The article notes that the insurance industry may begin to move toward usage-based insurance programs, especially given the willingness of these consumers to sacrifice some privacy for convenience and lower costs.

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